“Unmet needs”
The term gets thrown around a lot in the pharmaceutical industry…
It’s a kind of magic talisman that suggests market exclusivity, faster regulatory approval, and extended patent protection.
In especially promising cases, “unmet needs” gets accompanied by the word “significant.”
It’s rare, though, to find a pharma company that is truly innovative and truly pioneering…
A company that is out to revolutionize a standard of care.
If one does come along, it’s usually a company targeting rare diseases that affect only a few thousand or sometimes just a few hundred patients each year.
Thanks to government incentives and the ability to charge premium prices, these companies can prove very successful.
Take Vertex Pharmaceuticals (VRTX).
Its stock soared beginning in 2012 when it debuted treatments for cystic fibrosis (CF) in patients with specific genetic mutations.
Its first FDA-approved drug for CF was Kalydeco, which targets only the approximately 1,200 CF patients in the U.S. who have the G551D gene mutation.
Kalydeco is one of the most expensive drugs anywhere, costing over $300,000 per year and generating more than $5 billion in total revenue for the company as of 2022.
And of course, that revenue started a virtuous cycle that helped the company develop many other game-changing medications…
The result is that, since the FDA approval of Kalydeco, Vertex’s stock has soared 1,100%:
But as rare as it is to find a company targeting a genuine unmet need, it’s rarer still to find a company targeting an unmet need that affects hundreds of thousands of people each year.
One such company is Citius Pharmaceuticals (Nasdaq: CTXR).
The late-stage biopharmaceutical company, based in Cranford, New Jersey, is on track to completely transform the standard of care in patients with infections stemming from Central Venous Catheters (CVCs).
CVCs are thin, flexible tubes inserted into a large vein, typically in the neck, chest, or groin.
Each year, an estimated 7 million CVCs are used in the U.S., and they’re often used in extremely vulnerable patients:
- Intensive Care Unit (ICU) patients: Critically ill patients in ICUs often need CVCs to receive medications, fluids, and nutrition, and for regular blood sampling.
- Cancer patients: Patients undergoing chemotherapy frequently require CVCs to deliver chemotherapeutic agents — which can damage veins in the arms and legs — as well as immunotherapies, IV fluids, medications, and nutritional support.
- Patients with chronic conditions: CVCs are invaluable for many patients with chronic kidney disease, gastrointestinal disorders, severe chronic pain, or patients requiring long-term antibiotic therapy.
Of those 7 million CVCs, 4 million are used longer than a month, and those get infected surprisingly often…
In fact, in the U.S. each year, there are approximately 500,000 cases of central line associated bloodstream infection (CLABSI) and catheter-related bloodstream infection (CRBSI).
These infections are dangerous and carry a high risk of serious complications, with 12-25% of cases resulting in mortality or morbidity.
Right now, the standard of care for these infections is a course of antibiotics as well as the removal and replacement of the CVC.
The removal/replacement has a high risk of complications, is very painful for the patient, and frequently results in psychological trauma.
One study found that 57%–67% of patients had adverse physical and psychological symptoms from catheter removal and replacement, with 32% experiencing moderate-to-severe symptoms.
As noted, many patients with CVCs are extremely vulnerable and have limited venous sites for new placement…
Removal/replacement can cause damage to blood vessels, leading to scarring, stenosis, and thrombosis.
The process frequently results in delays to critical therapy and nutritional support.
It’s also expensive. The removal/replacement alone costs approximately $10,000 and the overall CLABSI/CRBSI treatment can cost as much as $65,000.
Clearly, this standard of care is woefully deficient, and there is a very significant unmet need for an alternative.
One such alternative is known as antibiotic lock therapy. This technique involves instilling a high concentration of antibiotics into the catheter to sterilize it without removing it.
The trouble is that there is currently no FDA-approved formula for this therapy. As a result, doctors have to mix their own “home brew” solutions, and these are often ineffective.
That’s where Citius Pharmaceuticals comes in.
Mino-Lok
In 2016, the company acquired the rights to a proprietary antibiotic lock solution called Mino-Lok from the University of Texas MD Anderson Cancer Center.
The solution was invented by renowned physician and researcher Dr. Issam Raad, whose extensive research on catheter-related infections with his team at the MD Anderson Cancer Center led to the discovery in the early 2000s.
Dr. Issam Raad
One of the significant challenges in treating catheter-related infections is the presence of biofilms — protective layers formed by bacteria that make the bacteria more resistant to antibiotics.
Mino-Lok’s formula — which has patent protection through 2036 — is specifically designed to penetrate and eradicate biofilms. It’s a combination of three components:
- Minocycline: A broad-spectrum antibiotic effective against a wide range of gram-positive and gram-negative bacteria.
- EDTA (Ethylenediaminetetraacetic Acid): A chelating agent that disrupts biofilms and enhances the antimicrobial activity of minocycline.
- Ethanol: An antiseptic agent that helps kill microorganisms and dissolve biofilms.
Mino-Lok is designed for use inside the catheter only, and not for systemic circulation.
The solution gets locked inside the catheter for two hours a day over a period of several days…
This short dwell time compares very favorably with “home brew” antibiotic lock solutions, which often require between 8 and 24 hours of dwell time and are therefore highly disruptive to treatment of patients’ underlying conditions.
In 2017, Mino-Lok received a “Fast Track” designation from FDA, which is granted to facilitate the development and expedite the review of drugs that treat serious conditions and fill an unmet medical need.
As Citius noted, the designation means Mino-Lok is eligible for:
- More frequent meetings with FDA to discuss the drug’s development plan and ensure collection of appropriate data needed to support drug approval;
- More frequent written correspondence from FDA about the design of the clinical trials;
- Priority review to shorten the FDA review process for a new drug from ten months to six months; and
- Rolling Review, which means Citius can submit completed sections of its New Drug Application (NDA) for review by FDA, rather than waiting until every section of the application is completed before the entire application can be reviewed.
Mino-Lok has also received a Qualified Infectious Disease Product designation from the FDA, which grants special incentives for the development of antibacterial or antifungal drugs intended to treat serious or life-threatening infections.
The most notable incentive is a 5-year extension of market exclusivity on top of the exclusivity the drug otherwise qualifies for.
Mino-Lok began its pivotal Phase III clinical trial — a multi-center, randomized, open label, blinded assessor, active control superiority study — in the second half of 2017.
The study enrolled 241 patients in the U.S. and India with long-term CVCs. They were randomized in a 1:1 ratio to receive either Mino-Lok therapy or standard of care antibiotic lock therapy.
The trial was an incredible success, and Citius released very encouraging topline data on May 21.
According to Citius:
The primary endpoint in the study was time to catheter failure between randomization and six-weeks following the first dose of Mino-Lok or SOC lock solution. Catheter failure was defined as the inability to administer study lock solution, catheter removal for any infection-related reason (including worsening clinical signs and symptoms or persistence or recurrence of baseline pathogen, or new infection), and all-cause mortality.
The trial achieved the primary endpoint with a very high statistical significance (p=0.0006).
The Median time-to-failure (MTF) of the Control group was 33 days, and the MTF of the Mino-Lok group exceeded the time the patients were on trial and therefore couldn’t be quantified.
The trial achieved critical secondary endpoints as well, including overall treatment success in 57.1% of patients in the Mino-Lok group compared to 37.7% of patients in the Control group (p=0.0025).
There were also no serious, drug-related adverse events, demonstrating that Mino-Lok was well tolerated.
In an investor call, Citius management explained that they’re working on the full data analysis “which should be completed in the next few months and submitted to the FDA, which will give a better insight regarding next steps, including the path to NDA submission and the path to commercialization.”
The success of the trial and the special FDA designations mean that Mino-Lok could be on an expedited path to capturing a market that Citius estimates at more than $2 billion globally with more than $1 billion of that in the U.S.
If approved, Mino-Lok would be the first and only FDA-approved treatment that salvages CVCs causing catheter-related bloodstream infections, and Citius believes it could potentially set an entirely new standard of care at a significant overall cost savings to the medical system.
While Mino-Lok is Citius’s lead candidate, it also has multiple other promising “shots on goal.”
LYMPHIR
The company has an exclusive license to develop and commercialize a cancer drug, LYMPHIR, in all markets except for Japan and certain parts of Asia.
LYMPHIR is a purified reformulation of denileukin diftitox, a previously FDA-approved cancer immunotherapy for the treatment of persistent or recurrent cutaneous T-cell lymphoma (CTCL), a rare form of non-Hodgkin lymphoma that afflicts roughly 3,000 people each year.
According to the company, CTCL “is a general term for T-cell lymphoma that involves the skin, but may also involve the blood, lymph nodes, and internal organs.”
The cancer results in various skin symptoms, including red, scaly patches, plaques, and tumors.
LYMPHIR has already gone through a Phase III clinical trial, demonstrating “meaningful benefits for trial patients who had previously been treated” including a 36.2% Objective Response Rate (ORR)
Nearly half — 49% — of patients in the trial experienced a complete response, partial response, or durable stable disease, and of those, 84% experienced a reduction in skin tumor burden and 48.8% had a ≥50% reduction in skin tumor burden.
These effects were durable as well, with a median of 6.5 months of controlled disease among patients who responded to LYMPHIR.
LYMPHIR has received an orphan drug designation (ODD) from the FDA for the treatment of CTCL, which grants Citius a potential seven years of market exclusivity if the drug is approved.
In March, Citius resubmitted a Biologics License Application (BLA) to the FDA for LYMPHIR to treat CTCL, and the FDA expects to complete its review of the BLA by August 13, 2024.
If the application is approved, Citius expects to commercialize LYMPHIR for CTCL later in 2024 at an estimated U.S. market size of $300-$400 million, though it says that “key growth drivers [are] expected to increase overall market size.”
Citius is in the process of spinning off LYMPHIR under a wholly owned oncology subsidiary named Citius Oncology.
The idea is to take that company public through a SPAC merger:
Upon closing, pursuant to the terms of the merger agreement, Citius Pharma would receive 67.5 million shares in Citius Oncology at $10 per share and retain majority ownership of approximately 90%.
The company expected the deal to go through in the first half of 2024 but the deal has been pushed back a few times under the seven monthly extensions available under their agreement.
Halo-Lido
A third Citius candidate is Halo-Lido, “a proprietary topical formulation of halobetasol and lidocaine that is intended to provide anti-inflammatory and anesthetic relief to individuals suffering from hemorrhoids.”
Halo-Lido had a very positive Phase 2b trial, with 300 patients with symptomatic hemorrhoids.
The trial found that “the high dose formulation of [Halo-Lido] … provided a meaningful reduction in symptom severity, as reported by patients, when compared to individual components alone. Moreover, there were no reported significant adverse events and [Halo-Lido] was well tolerated by patients in the study.”
Citius is now planning on an end of phase II meeting with the FDA to discuss the next steps in the regulatory and clinical development program.
If all goes well, Halo-Lido would be the first FDA-approved prescription product to treat hemorrhoids, a market Citius estimates at over $2 billion in the U.S. alone.
Wrapping Up
With a diversified, late-stage pipeline, multiple near-term catalysts, and commercialization potential on the horizon, Citius is poised for a major breakout in the second half of 2024…
As Simply Wall St. pointed out, “Citius Pharmaceuticals is bordering on breakeven, according to the 3 American Pharmaceuticals analysts. They anticipate the company to incur a final loss in 2024, before generating positive profits of US$1.2m in 2025.”
Citius insiders show strong faith in the company too, with co-founder and CEO Leonard Mazur investing $22.5 million of his own money directly into the company, and with co-founder and Executive Vice Chairman Myron Holubiak investing $4 million.
Analysts at H.C. Wainwright and the Maxim Group both reiterated their “buy” ratings for Citius (Nasdaq: CTXR) in May, with each of them setting 12-month price targets at $4.00 — a potential upside of more than 600% from its stock price as of this writing.
Citius is an ambitious company, out to revolutionize the standards of care for multiple conditions with genuinely unmet needs…
If the company succeeds, it will translate into significant financial returns, but most importantly, it will mean tremendous improvements in life quality for hundreds of thousands — perhaps millions — of patients.
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